Can severance agreement rule out seeking unemployment comp? — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Can severance agreement rule out seeking unemployment comp?

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in Employee Benefits Program,Human Resources

Q. In exchange for severance benefits, we would like a departing employee to promise not to file a claim for unemployment compensation. Can this be a term of our severance agreement?

A. No. Unemployment compensation benefits are available to certain employees who become unemployed through no fault of their own. The Minnesota Department of Employment and Economic Development (MDEED) decides whether an employee qualifies for benefits. If the employee voluntarily resigned his or her employment, or was terminated because of misconduct, that employee may be disqualified from receiving unemployment benefits.

While the severance benefits the employee will receive may offset some of the unemployment benefits he or she might have otherwise received, the MDEED will not deny benefits simply because it was a term of an agreement between the employer and the former employee.

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